27 Feb 2020 07:00
27 February 2020
finnCap Group plc
("finnCap" or the "Group")
Trading Update
The Group provides the following update on trading for the year ending 31 March 2020.
Throughout the year the equity capital markets division has continued to complete a variety of deals and has won a further 19 retained corporate clients, offset by client churn largely from delistings or acquisitions. The Board expects that the trading performance in the equity capital markets division will be in line with that recorded in the first half of this financial year.
In the M&A division the Board noted at the time of the interims that the outturn was reliant on a number of higher value transactions. Since then the timetable for these deals has lengthened, and the Board has now concluded that the trading performance in this division will be below that seen in the first half of the year.
Whilst deals have been slow to close in the M&A division, it has continued to sign up deal retainers during the period and since 1 April 2019 has signed 36 mandates and generated deal retainers of £1.2m. The level of deal retainers gives the Board confidence in the outlook for the division and the delayed transactions are expected to benefit the first quarter of FY21.
Overall the Board expects that the Group's trading performance for the second half of the financial year will be broadly breakeven, and that the Group will trade profitably for the financial year.
The Board has recently reduced the Group's operating expenses to ensure that the fixed costs of the business in FY21 will be broadly the same as in the current financial year.
The combination of the reduction in costs, the expectation that the M&A division will benefit from closing the larger deals delayed from the second half of the current financial year, and a continuing return to more normal market conditions in the equity capital market division, means that the Board expects the Group's trading performance in the first quarter of FY21 will show an improvement on its performance in the second half of the current financial year. The Board does however note the continued spread of COVID-19 and its effect on global capital markets and will closely monitor the situation.
The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
Contacts
finnCap Group plc Tel: +44 (0) 20 7220 0500
Sam Smith, Chief Executive Officer investor.relations@finncap.com
Tom Hayward, Chief Financial Officer
Grant Thornton (Nominated Adviser) Tel: +44 (0) 20 7383 5100
Philip Secrett/Samantha Harrison/Seamus Fricker
finnCap Ltd (Broker) Tel: +44 (0) 20 7220 0500
Rhys Williams